Projections Report: Setting business goals for CEOs in 2020
Think back to the business goals you set for your company in 2019, when the economy was at its slowest point. Did you hold back your ambitions? Did you lower your expectations? Did you operate from a defensive position instead of an offensive one?
Either way, it’s time to shift gears, because the dark clouds of 2019 are about to lift.
Where to focus in 2020
When setting your business objectives for 2020, there’s a lot to consider, including shifting business cycles, talent wars, overdue investments and future growth strategies. Given these different variables, how should you figure out where to focus your energy?
First, consider the top priorities identified by the high-performing CEOs surveyed in the Q4 2019 CEO Confidence Index: talent management, customer engagement, business operations, financials and leadership. Second, consider the underlying message embedded in these five areas: To succeed in 2020, your business objectives need to balance current challenges and future opportunities. In other words, you need to maintain fiscal discipline to ride out the rest of the slowdown, while also starting to strategize ways to capitalize on the opportunities the next business cycle will present.
To help guide your business plans, let’s take a closer look at these five priorities, along with the challenges and goals to consider.
Challenge: Competing for talent starts with retaining the employees you have today.
Priority: Invest in employee development to improve performance, engagement and retention.
As the economy rebounds and growth accelerates, CEOs will need to add headcount to support and drive new business opportunities. With the labor pool mostly drained, recruiting and hiring will remain essential. Meanwhile, employee retention and engagement will become critical. Losing a key employee can be devastating to a small or mid-sized business. Providing development opportunities helps ensure employee engagement. Developing leaders can’t be ignored, as frontline managers set the tone and drive performance.
Challenge: Evolving buyer behavior requires constant adaptation.
Priority: Improve sales productivity and execution to fuel the growth engine.
In any economic environment, the ability to connect with customers separates good selling from great selling. But as the next business cycle initiates, companies with skilled, knowledgeable and motivated sales teams will be best prepared to take advantage of new opportunities. Sales optimization is about more than just good numbers. It’s about constant refinement of the sales process; adaption of sales messaging; and integration and collaboration with marketing.
Challenge: Building capacity and efficiency to improve customer growth and satisfaction.
Priority: Leverage technology to drive change and improve productivity.
Improving the productivity of both employees and operations is a smart strategy for a slowdown. To increase productivity in the face of lower revenue expectations, organizations need to develop their employees, refine their processes and optimize their technology to reduce costs and build capabilities. Leadership can’t be ignored, as frontline managers set the tone and drive performance. When the economy does improve, high-performance organizations can quickly pivot to handle increased volumes.
Challenge: Identifying the start of your next business cycle will require rate-of-change data.
Priority: Make prudent fiscal decisions in the short term and monitor data that predicts when to change strategies.
Financial and cash/capital management are mandatory in all economic environments, but especially during a slowdown. The good news is, slowdowns present opportunities for organizations to identify their financial “turning points” and go on the offensive. Key Performance Indicators (KPIs) can shed insight on current conditions, which can then inform tactical decisions. Rate-of-change data can provide insight on momentum, which can then forecast the near future.
Challenge: Creating a short culture will be required to dominate the next growth cycle.
Priority: Focus on development and communication of organizational culture and values.
Culture has never been more important than today. While culture has always been critical to every business, the intensifying talent wars have raised its importance to a new level. Workers have more choice in employers than ever before. Competitive wages and compelling work still matter, but culture will retain your best employees, eject your worst employees and attract candidates who will thrive in your workplace.
The bottom line is, the time to prepare for prosperity is now. While managing the challenges of this economic cycle, get your business ready to capitalize on the next one.
Preparing for Prosperity:
The significance of the Vistage CEO Confidence Index, which Vistage has conducted since 2003, is that it has been a predictor of GDP 2 quarters in advance. The latest Vistage CEO Confidence Index – based on the sentiments of 1,604 CEOs and business leaders from small and midsize businesses – suggests that the economic slowdown will end by the midpoint of 2020.
Data from the Index also suggests:
After a peak of 110.3 reached in Q4 2017, the Index fell for seven consecutive quarters. But the Q4 2019 Index rose to 91.5 from the low of 85.0 recorded in Q3 2019, as shown in the graph below.
All of the six factors that comprise the Index rose in Q4 2019 from the low points recorded in Q3 2019. With views on the economy, expansion plans and business prospects on the rise, the data predicts that the U.S. economy will likely show accelerated growth later in 2020.
See the Index infographic for a full view of the Q4 2019 results.
Our latest research report, CEO Projections 2020: Preparing for Prosperity, takes a deeper dive into these issues.